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Retirement FAQs Pre-Retirement

General

  • Yes. FERCCA does not give you a choice about your retirement plan if:
    • If your agency corrected your records to FERS when it discovered an error and you later separated and took a refund of all FERS retirement deductions, or
    • If you belonged in FERS and your agency corrected your records when it discovered the error and you chose to withdraw your TSP contributions. See the question, I belonged in FERS. My agency discovered the mistake and corrected my records. I withdrew my TSP contributions. Can I now make an election under FERCCA? for the kinds of withdrawals that will prevent you from having a choice of retirement plans under FERCCA, or
    • If you received a payment ordered by a court or provided as settlement of a claim for losses resulting from a retirement coverage error, you may not make an election under FERCCA unless you repay the amount you received or OPM waives repayment.
    You also do not have a choice about your retirement coverage if: You are in: And you belong in: Your coverage must be corrected to: CSRS Offset CSRS CSRS CSRS CSRS Offset CSRS Offset Social Security-Only CSRS CSRS CSRS Offset CSRS Offset FERS FERS
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  • Make-up contributions are employee contributions that could have been deducted from your pay earlier, but were actually deducted later because of an error. When you are erroneously put in CSRS, CSRS Offset, or Social Security-Only rather than FERS, you are allowed to make up the TSP contributions that you could have made had you been in the correct retirement plan. By law, your TSP make-up contributions must be made as payroll deductions. You can't pay your TSP make-up contributions by check or rollover. Subject to the provisions of the TSP error correction regulations, you can decide how much you pay in TSP make-up contributions and how long you want to take to make the payments. TSP make-up contributions are treated as tax-deferred compensation for the year in which they are made up, but are subject to the elective deferral limit(s) for the year(s) in which they could have been made. So, your make-up contributions will reduce your taxable income for the year that you actually make the contribution. If you are in FERS and decide to pay TSP make-up contributions, your agency must also pay any attributable Agency Matching Contributions.
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  • No. The Social Security Law also includes a provision -- the Windfall Elimination Provision (WEP) -- that reduces Social Security benefits for individuals who have less than 30 years of "substantial earnings" under Social Security and who have earned a retirement benefit from employment not covered by Social Security; for example, CSRS service. The WEP was designed to eliminate the "windfall" that could result if you were to receive a CSRS annuity based on many years of employment not covered by Social Security and also receive a full Social Security benefit because you had a few years of employment covered under Social Security. The WEP, however, never totally eliminates the Social Security benefit you have earned. For example, in 2001, the maximum amount the WEP can decrease a Social Security benefit is $280.50 per month. For more information, see SSA's The Windfall Elimination Provision at http://www.ssa.gov/pubs/10045.html.
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  • No, you can't elect to change your FERS retirement coverage if you took a refund of all FERS retirement deductions.
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  • In the coming months, OPM will be providing agencies and employees with detailed information about FERCCA, the different retirement plans, and how you make an election. OPM wants to make sure that you receive complete counseling about your options before you make your election. Once you make your election, you cannot change it. OPM will contact you and provide you with detailed information regarding your options under FERCCA. For example, you will know how much you can expect to receive under each retirement plan, including Social Security and Thrift Savings Plan benefits. You do not have to make an election until you have had the opportunity to ask all questions you have about your retirement benefits. We at OPM realize that some of you may be postponing retirement or other major events until your retirement coverage error is resolved. While we will provide election information and benefits counseling as soon as possible, we will make special provisions for those individuals who need to make an election immediately.
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  • If your retirement coverage error was corrected in the past, you have until September 19, 2002, to make your election. Your agency and OPM have the authority to waive this deadline. If you are currently in the wrong retirement plan, you must receive written notice of the error and of your options under FERCCA. If you qualify to choose another retirement plan, you have 6 months from the date you are notified of the error to make your election.
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  • Lost earnings are earnings that you would have received if your TSP make-up contributions were deposited when they would have been deposited had you been in the correct retirement plan.
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  • If your agency put you in: If your agency put you in: And you belong in: If your agency put you in: Then you may choose between: CSRS or CSRS Offset FERS CSRS Offset and FERS coverage Social Security only CSRS Offset and Social Security-only coverage FERS CSRS FERS and CSRS coverage* CSRS Offset FERS and CSRS Offset coverage* Social Security only FERS and Social Security-only coverage* *If you already had this choice, you do not have an opportunity to change your election under FERCCA. See the question, My agency put me in FERS by mistake. When it discovered the error, my agency let me choose whether I wanted to remain in FERS. Do I get another choice under FERCCA? for an explanation.
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  •   Yes, FERCCA changes the rules on make-up contributions to the TSP for some individuals. Before FERCCA, you did not receive lost earnings on any make-up contributions you had withheld from your pay because of a retirement coverage error. You did receive lost earnings on agency contributions made to your TSP account. Under FERCCA, you can receive lost earnings on your make-up contributions if you choose to stay in FERS. You also continue to receive lost earnings on any contributions your agency makes to your TSP account. Before you're asked to choose retirement plans, OPM will give you information about your TSP benefits under both CSRS Offset and FERS.
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  • Yes, the Federal Retirement Thrift Investment Board issued proposed rules on April 19, 2001.
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  • Once the review process begins, it takes about 6 weeks (on average) for a decision on the individual's eligibility and for the required quality control reviews.
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  • If you are erroneously covered by FERS and you choose to move out of FERS, FERCCA allows you to keep the employee contributions you made in your TSP account (plus the earnings attributable to your contributions) even if the contributions exceed 5 percent of the basic pay you earned for the pay period that contributions had been made. However, all Government contributions that were made to your account and the attributable earnings must be removed from your account if you do not choose FERS. If you choose FERS coverage under FERCCA, you may make up those employee contributions that you could have made had you been correctly covered by FERS, as provided by the current TSP error correction legislation. In addition, you will receive the agency automatic (1%) contributions and agency matching contributions that you should have received had you been correctly covered by FERS. Finally, you will receive lost earnings on both your employee and agency make-up contributions. (Prior to FERCCA, lost earnings were payable only on agency make-up contributions.) The lost earnings on both employee and agency contributions will be determined the same way lost earnings are now determined on agency make-up contributions (that is, as provided by the current TSP regulations).
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  • Everyone born in 1929 or later needs 40 credits to be eligible for Social Security retirement benefits. Since you can earn 4 credits per year, you need at least 10 years of work that subject to Social Security to become eligible for Social Security retirement benefits. When you work in a job that is subject to Social Security, your wages are posted to your Social Security record and you receive earnings credits based on those wages. The Social Security Administration uses these credits to determine your eligibility for Social Security retirement benefits and for disability or survivors benefits if you should become disabled or die. Each year, the amount of earnings needed for a credit rises as the average earnings levels rise. In 2001, you receive 1 credit for each $830 of earnings, up to the maximum of 4 credits per year.
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  • The Government Pension Offset is part of the Social Security Law that reduces spouse or survivor Social Security benefits for certain individuals who are also entitled to a Federal Government pension. If you retire from the Federal service under CSRS and are also eligible for Social Security benefits as a spouse, former spouse or survivor, your Social Security benefit will be reduced. It is reduced because you are receiving a pension from the Federal Government based on earnings that are not covered by Social Security. For every $3 you receive from your CSRS annuity, your Social Security spousal benefit is reduced by $2. For more information, see SSA's publication, Government Pension Offset at http://www.ssa.gov/pubs/10007.html.
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  • Your make-up contributions will be invested based on your most recent contribution allocation. For example, if you currently allocated 75% of the TSP contributions withheld from your pay to go to the C Fund and 25% to go to the G Fund, your make-up contributions will be allocated in the same manner. If you don't have a contribution allocation on file with the Federal Retirement Thrift Investment Board, the make-up contributions will be invested in the G Fund. You may also get lost earnings on your make-up contributions. The amount of the lost earnings you receive are based on the contribution allocation in effect at the time the make-up contributions would have been made had you been correctly covered by FERS. For example, suppose you are going to make-up contributions for the period January 11, 1995 to July 6, 1995. During that period you may had allocated 45% of the contributions withheld from your pay to go to the G Fund and 55% to go to the C Fund. The lost earnings on your make-up would be computed as though 45% of your make-up went to the G Fund in 1995 and 55% had gone to the C Fund. If you didn't have a contribution allocation, the lost earnings will be based on the return of the G Fund.
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Total Count: 61, Number of Pages: 5, Page: 2
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